Posts Tagged: "march-in rights"

For well over a year, Senator Elizabeth Warren (D-MA) and some members of Congress have engaged in a campaign to urge the Health and Human Services Secretary Xavier Becerra to break patents on pharmaceuticals to lower drug prices by invoking a century-old statute, Title 28 of the U.S. Code 1498. This is their “game plan”: HHS should contract with generic drug companies willfully to infringe pharmaceutical patents, thereby requiring any damages to be paid from public funds. This strategy took a new tack in early March 2023, when the Biden Administration’s Justice Department filed a surprise “Statement of Interest” in a private lawsuit on behalf  “the Government and its Department of Health and Human Services and the Department of Defense.” The case, filed in Delaware federal court, was initiated by Arbutus Biopharma and Genevant Sciences, which allege that that patents they own were infringed by Moderna in producing its version of the COVID-19 vaccine.

Health and Human Services (HHS) Secretary Xavier Becerra may consider himself a lucky man (which would probably sound ironic to him at the moment). He just received three letters which aptly summarize the fork in the road he faces in deciding which way to turn in a critical policy decision. On June 23, Senator Elizabeth Warren (D-MA) and Rep. Lloyd Doggett (D-TX), joined by 98 of their Democratic Congressional colleagues, sent him the latest in their series of letters urging him to use alleged existing authorities so that copycats can make expensive drugs to lower health care costs. That triggered an immediate rebuttal from six associations representing research universities and hospitals (including the Bayh-Dole Coalition, which I lead) and another from the Licensing Executives Society, USA & Canada, Inc. (LES), representing the licensing profession. It seems appropriate to let the letters speak for themselves, so let’s start with the Congressional letter, urging the Secretary to use tools they allege he already has to cut the Gordian Knot to lower drug costs.

As Knowledge Ecology International and its allies await the decision of the National Institutes of Health (NIH) on their latest attempt to misuse the Bayh-Dole Act for the government to set prices on any product based on a federally funded invention, they’re growing more uneasy. And that’s understandable. If you’d bet the house on an ivory tower theory that’s been summarily rejected for the past 18 years every time it’s been trotted out, you’d be uneasy too. They know that if the Biden Administration rejects the pending petition to march in on the prostate cancer drug Xtandi because of its cost, this leaky vessel can’t be credibly refloated again.

As discussed previously, the critics are in full howl now that their attempts to enact legislation controlling drug prices has failed once again. They are applying unprecedented political pressure on Secretary Xavier Becerra at the Department of Health and Human Services (HHS) to misuse the march in provisions of the Bayh-Dole Act to accomplish their goal. Nearly 100 distinguished organizations and individuals endorsed the following letter from the Bayh-Dole Coalition, which I lead, warning HHS not to take this disastrous misstep. Here’s what we said.

Thirty-one signatories from 29 center-right public policy organizations have written U.S. Health and Human Services Secretary Xavier Becerra, urging him to deny a petition from Knowledge Ecology International that requests use of march-in rights under the Bayh-Dole Act against the prostate cancer medicine, Xtandi. The conservative organizations represented on the letter include some of the most prominent center-right groups, such as the American Conservative Union, Americans for Prosperity, Americans for Tax Reform, the Competitive Enterprise Institute, Eagle Forum Education & Legal Defense Fund, FreedomWorks Foundation and Heritage Action for America. Conservatives for Property Rights led the letter initiative.

Some say the definition of insanity is doing the same thing over and over while expecting a different outcome. That would appear to be the case with the recent refiling of a petition by Knowledge Ecology International (KEI) to the National Institutes of Health (NIH) asking it to march in under the Bayh-Dole Act to force licensing to additional parties of the prostate cancer drug Xtandi, because of its cost. The law allows academic institutions, companies and federal laboratories to own and license inventions made with government support. Similar petitions were rejected by NIH and the Department of Defense (which funded the research on the underlying invention) in the Obama/Biden Administration for a simple reason: the law is for the commercialization of federally funded inventions; it does not allow the government to set prices for successful products.

In the wake of the development of COVID-19 vaccines, the Biden-Harris Administration has suggested major shifts in U.S. policy concerning patent protection. In May of this year, Ambassador Katherine Tai, the U.S. Trade Representative (USTR) announced the Administration’s support for waiving intellectual property protections for COVID-19 vaccines. Most recently, the National Institutes of Health (NIH) Director Dr. Francis Collins accused Moderna of excluding three NIH scientists as co-inventors of a key patent for the COVID-19 vaccine. This article explores an alternative possibility of the Administration exercising certain rights in the COVID-19 vaccine invention under the 1980 Bayh-Dole Act—one day after the bill’s co-sponsor, Senator Bob Dole, passed away—and whether such an exercise of rights is in line with past precedent or would be a violent disruption to the status quo.  

What would you say about a technology commercialization system that kept on performing even through the worst pandemic in over a century? How about if it improved its performance over the previous year and was a critical factor in developing desperately needed therapies to protect people around the world? Would it seem reasonable that this was something that all of us should highly value and want to protect? You might think so, but some in Washington apparently don’t agree.

Sensing an opening after the Biden Administration’s recent Executive Order put a hold on a pending regulation prohibiting the misuse of the march-in rights provision of the Bayh-Dole Act for price control, Congressional opponents of the law dusted off a ploy that failed in the Obama Administration to try their luck again. They’ve written to Secretary of Defense Lloyd Austin and Health and Human Services Secretary Xavier Becerra urging them to march in to control prices of drugs created from inventions arising from R&D their agencies supported. We likened that aspect of the Executive Order to shooting ourselves in the foot, and it seemed as though it would be a while before we would know if the Administration would pull the trigger or not. With the recent Congressional actions, the day of reckoning may not be far off.

The Biotechnology Innovation Organization (BIO) recently submitted comments in support of a National Institute of Standards and Technology [NIST] rulemaking on “Rights to Federally Funded Inventions and Licensing of Government Owned Inventions.” The proposed rule caps a nearly three-year effort by NIST, through engagement with stakeholders, to improve federal technology transfer and the commercialization of federally funded inventions. That effort resulted in a comprehensive Green Paper, “Unleashing American Innovation” in April 2019, which reviewed federal research efforts and made detailed recommendations to maximize the taxpayers’ return on investment.

On January 12, the National Institute of Standards and Technology (NIST) published a request for comments on proposed changes to regulations that support the University and Small Business Patent Procedures Act of 1980, which is more commonly known as the Bayh-Dole Act. At the time, NIST explained that this important update to Bayh-Dole represents a key element of the Return on Investment Initiative, which seeks to maximize American innovation arising from the federal government’s more than $150 billion annual investment in research and development. Monday, April 5, was the deadline to submit comments to NIST on the proposed rule revisions. Below are a handful of excerpts to comments submitted, together with links to the full text of the comments.

Two organizations with which I work have filed comments with NIST on its Bayh-Dole regulatory proposals. The National Institute of Standards and Technology, or NIST, approaches completion of its two-and-a-half-year effort known as the Return on Investment Initiative, as the regulatory revision stage nears its close. NIST has conducted a commendable process and proposed mostly constructive or reasonable updating to rules associated with the Bayh-Dole Act. But one proposal puts at risk the continued success of the storied law for democratizing technology transfer and commercializing inventions coming from federally sponsored research. That is, this law facilitates bringing to practical use inventions that otherwise would sit on shelves.

The new Presidential Administration has hardly settled in before being confronted with a stark choice: will they continue policies that foster public/private sector R&D partnerships or be diverted down a path that’s been a dead-end? President Biden faces two herculean tasks: getting the COVID-19 pandemic under control while reviving the economy. The problems are intertwined and require continuous innovation to overcome, which means tapping the best minds in our public and private sectors. We’ve just witnessed a modern miracle, as such partnerships seamlessly came together to create effective COVID-19 vaccines and therapies in record time. But the policies these collaborations depend on are now being questioned.

How many people or organizations could undergo an exhaustive investigation into everything they’ve done over the past 30 years and emerge unscathed? That’s what just happened to the technology transfer operations at the Department of Health and Human Services (HHS), with the spotlight primarily focused on the National Institutes of Health (NIH). Of course, an exercise like this has to find something, so the report that resulted from this exercise is titled “NIH Should Publicly Report More Information about the Licensing of Its Intellectual Property”. After extensive digging, all it uncovered are some pretty small potatoes.

By now, everyone in the IP arena has heard about the demands of more than 30 state and territorial attorneys general (AGs) regarding the promising COVID treatment remdesivir. These AGs seem to disrespect the exclusive rights of limited duration that patents afford. California Attorney General Xavier Becerra (D) and Louisiana Attorney General Jeff Landry (R) led a bipartisan effort getting colleagues to write the U.S. Department of Health and Human Services and call for what’s tantamount to eminent domain on intellectual property. To a conservative who works on IP matters, this demand in and of itself is troubling. Bedrock conservative principles include property rights, free enterprise and the rule of law. The AGs advocate government’s abrogation of all three of these foundational principles.